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| (PPC) Model |
Primary models for determining pay-per-click
Cost-per-impression (CPM) model:
In this model, the advertiser pays for every 1,000 impressions of their ad.
Cost-per-click (CPC) model:
Under
this model, the advertiser pays each time their ad is clicked. This is the most
common pricing model used for PPC advertising.
Cost-per-action (CPA) model:
In
this model, the advertiser pays for a specific action, such as a sale or a
lead, that is generated as a result of their ad.
Explanation Of Model
Cost-per-impression (CPM) model:
In this model, the advertiser pays for every 1,000 impressions of their ad.
This means that the advertiser pays a certain amount for every 1,000 times
their ad is shown to users. For example, if the CPM rate is $10, and the ad is
shown to 100,000 people, the total cost of the advertising campaign would be
$1,000 ($10 x 100). This model is typically used by advertisers who want to
increase brand awareness and reach a large audience.
Cost-per-click (CPC) model:
Under
this model, the advertiser pays each time their ad is clicked. This means that
the advertiser only pays when a user clicks on their ad and is taken to the
advertiser's website. For example, if the CPC rate is $0.50 and the ad is
clicked on 100 times, the total cost of the advertising campaign would be $50
($0.50 x 100). This is the most common pricing model used for PPC advertising
and is typically used by advertisers who want to drive traffic to their
website.
Cost-per-action (CPA) model:
In
this model, the advertiser pays for a specific action, such as a sale or a lead,
that is generated as a result of their ad. For example, an advertiser might
agree to pay $10 for each sale that is made as a result of someone clicking on
their ad. In this case, if the ad generates 100 sales, the total cost of the
advertising campaign would be $1,000 ($10 x 100). This model is typically used
by advertisers who want to generate a specific action, such as a sale or a
lead, and are willing to pay more for each action than they would under the CPC
or CPM model.